LDK Solar Uses the "Last In Never Out" Method, Fails to Get It to Catch On
A good settlement will WIP them into shape
Overstating inventory isn't that big of a deal, right? Um, 25%?! Slow it down, there, killer, someone's got to use those financial statements...
A class action settlement involving LDK Solar has received preliminary approval by a United States District Court Judge in the Northern District of California, according to an LDK Solar class action settlement news report. The LDK Solar class action settlement will not be final until the settlement class is notified and the court grants final class action settlement approval.
According to reports, LDK Solar has agreed to pay $16 million to settle the class action lawsuit that reportedly alleged that LDK Solar made a series of misrepresentations to the market by overstating its polysilicon inventory by 25%, which allegedly artificially inflated the company’s share price between August 1 and October 3, 2007.
That's only 5% worth of damages "suffered" by stockholders. Overstock shareholders, are you idiots paying attention?
JLM Pacific Epoch:
The first filed complaint, Tsang v. LDK Solar (NYSE:LDK), was filed on October 9, 2007, alleging a series of false and material misrepresentations to the market which artificially inflated the company's share price between August 1 and October 3, 2007, according to a posting on Stanford Law School's Securities Class Action Clearinghouse website. LDK's share price fell by almost 25% on October 3, after LDK's former financial controller, Charley Situ, said that LDK had overstated its polysilicon inventory by 25%, said the posting.
In an October 4, 2007 filing with the US Securities and Exchange Commission said that, following an email from Situ, it had formed an internal committee to investigate the allegations and conduct an inventory of LDK's polysilicon materials. The team found no material discrepancies, LDK said in the filing. Situ had been terminated for cause on September 24, 2007, said LDK.
If overstating inventory gets you $16 million, I'm sure Patrick Byrne has already done the math. Besides, what are the odds of an SEC enforcement anyway?
It's sort of like the people who ride Muni "for free" here in San Francisco. If a ticket for being caught on the bus is $75 and you can likely ride the bus without paying at least 10 - 25 times without running into the Muni Gestapo checking for passes or transfers, you do the math. It's only one's moral fortitude (and ability to pay, I suppose) that forces one to pay the fare.
Same with fucking investors. Honor system, people, honor system.